Thursday, June 12, 2014

Factors To Consider When Renting Medical Equipment

By Lila Bryant


Medical facilities are faced with one of the most expensive and somehow sophisticated equipment investments. In order to have a significant impact on their clients, individuals and institutions that are engaged in practicing medical services are faced with the need of procuring the latest and state of the art equipment. However, with all this investment, the very tools are quickly rendered obsolete by the passage of time and the ever changing technology. It is therefore important and necessary to thoroughly analyze each and every investment decision in order to realize the most economical use of the scarce financial resources. This particularly entails a close comparison between making a purchase and renting medical equipment.

One can rent a wide variety of these instruments. Some of the tools you can rent include surgical implements, MRI machines, EMR software, computers, X-ray and ultrasound machines, imaging and diagnostic instruments, surgery tables among others. However, before embarking on this agreement, it is important to consider some vital factors, as illustrated below.

To begin with, it is important to first of all carry out a lease vs. Buy analysis. The analysis enables you to be sure that you are engaging in the best financial decision. The process entails comparing the item prices across different major manufacturers, against lease quotes obtained from numerous medical tools leasing companies.

But to enhance an inclusive financial analysis, be sure to collect all your pertinent financial data at your disposal. It is this information that will enable you to analyze and evaluate the feasibility of a particular investment. Determine the incremental cash flows (additional revenues and expenses) resulting from the investment. Incremental analysis will illustrate how a particular investment is going to improve the overall business performance, as opposed to simply analyzing whether or not a single portfolio will generate profit on its own or not.

The comparison should however not stop here. Further analyze the data with a break even analysis, a net present value analysis and a payback value analysis. With these analyses, you are furnished with both the short and long term financial implications of the particular investment. It also denotes the duration of time it will take to recoup the initial investment.

However, the cost of renting depends to a great extent on the rate of the lease and the periodic payments. As such, carry out and evaluation of the factors affecting the periodic payments and the lease rate. For example, the period of the lease has a profound impact on the terms and the amount of charges associated. Clearly spell out the duration of your lease.

The frequency of repair of the concerned item must also be considered, together with the kind of lease to be adopted. The service schedule (the frequency and convenience of repair) of the tool ought to be put in mind. A good deal should entail fewer repairs, with the service being undertaken on-site. Leases can also be classified as capital and operating. Capital leases have capital allowances, with residual ownership of the equipment while, operating leases are purely rental agreements. As such, capital leases are relatively expensive.

The decision to buy or rent a medical appliance depends on determining which of the two choices is more beneficial especially for your practice. The best investment is one that fits well with your overall business plan and is quite promising compared to other investment opportunities, both on the short run and the long run.




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